Tesla, the Beckham Experiment of the Electric Car Market
John is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
When David Beckham, an international soccer icon, first came to the Los Angeles Galaxy six years ago, most people thought his $250 million salary was a joke only destined to make the club and ultimately Major League Soccer (MLS) fail. Yet, the price tag for Beckham wasn’t all for playing. Rather, the megadeal for Beckham also included marketing and branding rights aimed at helping the Galaxy and the league gain fan interest globally which in turn would attract other top foreign players and help raise the profile for soccer in the U.S. Why do we dare mention sports in a next generation energy blog? Easy. We think all the talk of the electric vehicle market being a failure is absolutely ridiculous and shockingly premature. In fact, we believe there are a lot of similarities between the auto world’s electric vehicle development and the Beckham Experiment. That’s a good thing for the outlook for electric cars in our view.
Thanks to Beckham, the MLS is attracting world class talent such as France’s Thierry Henry, Ireland captain Robbie Keane and now talks of Brazilian great Kaka coming to the league are making the rounds. Beckham’s arrival has helped the league achieve record attendance (up 21.4% since 2006), add new franchise markets (San Jose, Seattle, Philadelphia, Vancouver, Portland, Montreal), build soccer specific stadiums (Houston, Kansas City, New York) and just last weekend the Galaxy won back-to-back championships. Plus, you can’t ignore the fact MLS, a league largely in obscurity a few years back, now televises games on major media outlets such as ESPN, ESPN2 and ABC. So it appears the Beckham Experiment was a big success after all.
Likewise, Tesla (NASDAQ: TSLA), arguably, the Beckham of the auto world, is building global awareness of electric vehicles with some star power of its own. Regardless of current price points on Model S sedans and the goal to produce electric cars for the masses, the California company made a huge splash on the auto world when it debuted the Roaster back in 2008. Considered an overpriced entry into a largely unproven market, Tesla nevertheless found a cult following, it greatly learned from its customers (like Apple) and it capitalized on an incredible executive will to win from CEO Elon Musk which has now, four years later, resulted in the Motor Trend Car of the Year award. It took Beckham five years to hoist a championship trophy (LA Galaxy won in 2011 too). It took Tesla just four. Maybe the Beckham Experiment could equally be referred to the Tesla Experiment as well. The key difference is the use of a current icon versus one (Nikola Tesla) who left his mark on electrical engineering years ago. What’s clear is Beckham’s Galaxy has fans all over the world. Now, so does Tesla.
Tesla has attracted major players (GM, Nissan,Toyota, BMW, Ford, Mitsubishi) and even newcomers like Fisker and CODA to enter the electric vehicle market. We want to remind you that it does take time to build winning tradition, but we are confident the electric vehicle market will be a success. Despite massive criticism, the Beckham Experiment worked and likewise the early success of the Tesla Experiment is following. Yes Tesla has a long way to go but so does the sport of soccer in a U.S. market competing with football, baseball and basketball.
However, charging infrastructure is being built nationally (just like new soccer specific stadiums), new models are being released and outreach is happening (i.e. Tesla retail stores to better help interested parties learn about its product—similar to the David Beckham Soccer Academy originated to teach kids the game of soccer). More players entering the electric vehicle market will only help drive awareness and economies of scale which means lower priced vehicles for consumers are coming. Similarly, more U.S. born soccer players are taking up the sport thanks to Beckham’s influence on the game and that should lift the profile of the sport domestically.
Just because electric vehicle sales (in a recession mind you) did not meet forecasts and expectations, we believe a little more patience is warranted before trashing the electric vehicle industry and calling some players a waste of money or “prima donnas,” a term given to Beckham from time to time throughout his career. Championships are associated with winners, not prima donnas. Just ask Beckham (titles at Manchester United, Real Madrid and yes, back-to-back at the Galaxy). Actually, scratch that. Just ask Elon Musk and Tesla (2012 Motor Trend Car of the Year).
bluephoenixinc has no positions in the stocks mentioned above. The Motley Fool owns shares of Tesla Motors. Motley Fool newsletter services recommend Tesla Motors . Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!